Multiple Choice Questions
1. Paying off bonds payable is reported on the statement of cash flows under
a. Noncash investing and financing activities.
b. Investing activities.
c. Operating activities.
d. Financing activities.
2. The sale of inventory for cash is reported on the statement of cash flows under
a. Financing activities.
b. Noncash investing and financing activities.
c. Investing activities.
d. Operating activities.
3. Selling equipment is reported on the statement of cash flows under
a. Financing activities.
b. Investing activities.
c. Noncash investing and financing activities.
d. Operating activities.
4. Which of the following terms appears on a statement of cash flows indirect method?
a. Cash receipt of interest revenue
b. Collections from customers
c. Depreciation expense
d. Payments to suppliers
5. On an indirect method statement of cash flows, an increase in a prepaid insurance would be
a. Added to increases in current assets.
b. Included in payments to suppliers.
c. Deducted from net income.
d. Added to net income.
6. On an indirect method statement of cash flows, an increase in accounts payable would be
a. Reported in the financing activities section.
b. Reported in the investing activities section.
c. Added to net income in the operating activities section.
d. Deducted from net income in the operating activities section.